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Proposed $350 Million Class Action Settlement Regarding Drug Pricing Provides Consumers and Third-Party Payors With Money Back

Posted on: Thursday, 23 April 2009, 08:00 CDT

WASHINGTON, April 23 /PRNewswire-USNewswire/ -- The United States District Court for the District of Massachusetts has preliminarily approved the settlement of a class action with McKesson, a large drug wholesaler. The lawsuit, called New England Carpenters Health Benefits Fund v. First DataBank, Inc., concerns the pricing of more than 450 brand-name drugs, and consumers and Third-Party Payors ("TPPs") could get money back.

Prescription drugs are often priced using certain benchmarks. The most common pricing benchmark is sometimes called the Average Wholesale Price, or "AWP." AWP is often used in determining how much insurance companies will reimburse for these prescription drugs and the co-payment price that some consumers pay for them. The lawsuit claims that two Defendants, McKesson and First DataBank, a publisher of drug data, wrongfully inflated the mark-up factor used to determine the AWP of over 450 drugs. The lawsuit alleges that, as a result, many drug purchasers overpaid for these drugs. FDB and McKesson deny any wrongdoing.

McKesson has agreed to settle the claims against it and will pay a total of $350 million into a Settlement Fund to benefit a class of consumers and non-governmental Third-Party Payors with up to $60 million allocated to consumer Class Members alone.

Included in the McKesson Proposed Settlement are consumers who paid percentage co-payments for any of the settlement drugs between August 2, 2001 and March 15, 2005; uninsured or underinsured consumers who paid the cash price of any of the settlement drugs between August 1, 2001 and January 23, 2009; and TPPs that paid or reimbursed for all or a part of the cost of any settlement drug from August 2001 to March 15, 2005. TPPs include, but are not limited to, insurance companies, health plans, union health and welfare plans, and self-insured employers.

Potential members of the class of TPPs and consumers who paid a percentage co-payment were previously notified of the pending trial against McKesson and had until November 15, 2008 to exclude themselves from the Class. Class Members who did not exclude themselves are included in the Proposed Settlement and will be bound by the Court's rulings. Uninsured or underinsured consumers who paid the cash price of settlement drugs may exclude themselves and will not get money back but will keep their rights to sue McKesson at their own expense. A request for exclusion must be in writing by June 8, 2009. The Court will determine whether to approve the McKesson Proposed Settlement at a Fairness Hearing on July 23, 2009 at 2 p.m.

"The McKesson Proposed Settlement will allow consumers and TPPs to receive some money back in the near future if they file a claim," said Steve W. Berman of Hagens Berman Sobol Shapiro LLP, Counsel for the Plaintiffs in this case.

For detailed information and a list of all the drugs included, call toll-free 1-877-625-9414, visit www.AWPClassActions.com, email info@AWPClassActions.com or write: McKesson Settlement Administrator c/o Rust Consulting, Inc, PO Box 24607, West Palm Beach, FL 33416.

SOURCE McKesson Settlement Administrator

Source: PR Newswire

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